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Bank regulation and supervision around the world : a crisis update (English)

This paper presents the latest update of the World Bank Bank Regulation and Supervision Survey, and explores two questions. First, were there significant differences in regulation and supervision between crisis and non-crisis countries? Second, what aspects of regulation and supervision changed significantly during the crisis period? The paper finds significant differences between crisis and non-crisis countries in several aspects of regulation and supervision. In particular, crisis countries (a) had less stringent definitions of capital and lower actual capital ratios, (b) faced fewer restrictions on non-bank activities, (c) were less strict in the regulatory treatment of bad loans and loan losses, and (d) had weaker incentives for the private sector to monitor banks' risks. Survey results also suggest that the overall regulatory response to the crisis has been slow, and there is room to improve regulation and supervision, as well as private incentives to monitor risk-taking. Specifically, comparing regulatory and supervisory practices before and after the global crisis, the paper finds relatively few changes: capital ratios increased (primarily among non-crisis countries), deposit insurance schemes became more generous, and some reforms were introduced in the area of bank governance and bank resolution.

Details

  • Author

    Cihak, Martin Demirguc-Kunt, Asli Peria, Maria Soledad Martinez Mohseni-Cheraghlou, Amin

  • Document Date

    2012/12/01

  • Document Type

    Policy Research Working Paper

  • Report Number

    WPS6286

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    World,

  • Region

    The World Region,

  • Disclosure Date

    2012/12/01

  • Disclosure Status

    Disclosed

  • Doc Name

    Bank regulation and supervision around the world : a crisis update

  • Keywords

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Citation

Cihak, Martin Demirguc-Kunt, Asli Peria, Maria Soledad Martinez Mohseni-Cheraghlou, Amin

Bank regulation and supervision around the world : a crisis update (English). Policy Research working paper ; no. WPS 6286 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/279091468168248726/Bank-regulation-and-supervision-around-the-world-a-crisis-update